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New Job Due Diligence Is a Must
By Anthony J. LoPinto
June 9, 2003
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Time and again we hear about a professional who left a fine job for another opportunity only to find out too late that the situation at the new company was not as advertised, and represented a bad career move. I heard such a story just last week.
The CFO of a REIT decided to leave for a "more entrepreneurial play" only to find out that the financial condition of the private company he joined was dire, the principals were not forthright about the situation and he was immediately immersed in a major workout that has led to a sale of the company. His payout will be insignificant compared to what he thought to be the potential, and now he's facing a very difficult career situation. The lesson to be learned is to never take a job without doing proper due diligence on the company and the management team.
Due diligence is not new to real estate professionals. Most do it on the job every day in one form or another. However, when it comes to due diligence on a prospective employer, some of the most savvy pros don't do enough homework to truly understand what they are getting into.
Most professionals consider due diligence to be an evaluation of the company's viability and verifying the proposed compensation. However the assessment must be much deeper to fully evaluate the situation. Some areas you should underwrite include: The personalities, management philosophy and reputation of the company's leaders and managers; the entire management team, not just one executive; the company's corporate culture; and the success of other professionals within the organization, including tenure and career progression.
If you are working with a recruiter, you should expect that they will provide you with a good perspective on the company. Before we take on an assignment we evaluate the potential client to make sure that they are what they represent themselves to be, and that the opportunity as presented would be a good move for an outstanding professional. Even though the recruiter is paid by the company, you should expect that they will provide you with a realistic assessment of not only the opportunity but also of the company and its management team. If they don't, work with someone else.
Evaluating a potential opportunity and employer thoroughly will not only prevent you from becoming involved in the wrong job, but it will also prepare you for interviews with the right ones. Start with annual reports and public filings where available. Read the company's marketing brochures and look at its website. Understand how the company portrays itself.
Talk to as many knowledgeable people as possible, both inside and outside the company. What is the company's reputation in the industry? What do customers and vendors say? What's the word on the street? Find former employees - and find out why they left and what the working environment was like. They a re often the best source of information and perspective on the company and management team.
Remember, a new job is a career move, it's not just another deal, so do your homework at a deep level, and you'll improve - significantly - your chances of avoiding a potentially serious career situation that can take years to repair.
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